The Ledger
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Kleiner Perkins sold G Squared terrible early cleantech deals
“And there were some dogs in there, some cleantech shit that Kleiner Perkins sold me that was just a flaming bag of turds on your front porch.”
G Squared lost 20% on Uber and made 3x on Lyft
“We lost I think we made, we lost like 20 cents on the dollar, and Lyft we made like a three X.”
Silicon Valley exhibits sheep-like herd mentality in secondary trading
“One of the issues with Silicon Valley, one of the benefits of being in Chicago is we isolate ourselves a bit from the herd mentality. And it's like, sometimes it's like sheep. They just jump one on after another and they buy more stock and things that you see …”
Anne Wojcicki was a visionary founder but not a great public CEO
“You got Ann Wojciechowski, who's a fantastic founder, in my opinion to not maybe a great public CEO, but awesome founder and visionary of what she wanted to build and the ability to go do it.”
TVPI and MOIC are fake venture performance numbers
“I mean, my belief is that TVPI and MOIC are not the stats that people should be focused on, and they are. I don't, I think they're fake numbers.”
G Squared outsourced early investment committee memos to analysts in India
“My early investment committee memos and the early vintages were outsourced to, you know, a group of really smart analysts in India, that you could pay a fraction of what you could pay talent in the US.”
G Squared concentrates 80% to 90% of its risk in 10 companies
“And still to this day, which some people are not comfortable with, 80, hopefully 90% of our risk are in 10 companies.”
G Squared agreed to a $150M Spotify deal with a $125M fund
“Before we left the meeting, they were like, do you think you could buy a hundred and fifty million dollars worth of stock? And I said, sure. And I didn't have the money, because we were in the process of raising the fund, and I think we had like closed on a hu…”
Growth VCs miss 2.5x net targets if entry valuation is off
“Because at our stage, unlike yours, which it doesn't, you know, from your seat, in a lot of ways I envy your seat, because if you pay 50 pre or a hundred pre, if it's a good business, you're still gonna make a five X. A 10 pre, 50 pre, does it really matter fo…”
VCs should dollar-cost average out of positions post-IPO
“Dollar cost average out just like your dollar cost average in and just start getting liquidity when you can privately and continuing it through when they list.”
Getir's main mistake was expanding beyond low-labor-cost Turkey
“I think the mistake the company made there was it left Turkey and didn't focus maybe on other markets that were similar to Turkey from a employment cost perspective.”
Getir investment cost G Squared $500M in capital and LP churn
“In that case, from that fund, my guess is those decisions we made cost our partnership probably a half a billion dollars of capital. Between capital actually lost, and investors that you can't bring back.”
VC funds should only offer co-investments on core fund deals
“The way we run it today is the way I think people should run their, only in conviction, when your funds are investing alongside of it, that's when you do the co-investment. You don't do it the way we did it in twenty-twenty.”
Growth investors should focus on absolute dollar prices and DPI, not dilution
“I don't give a shit about the dilution. I care about the price I pay. In dollars. And the price I'm going to sell it at, in dollars. I am focused on DPI, not MOIC. I don't care about the dilution.”
Hundreds of legacy private tech companies are 'zombies' doomed by AI
“You have incumbents that are large. We call them, there's two types of companies that were, that are big and private that aren't in AI. They're kind of, we talk internally, we call them vampires and zombies. Because they're massive. Many of them are profitable…”
Offloading $1B of Anthropic stock in private markets is extremely difficult
“Today I think there's a handful of liquid private companies basically. They're quasi-liquid. But at scale. Small positions, yes. But try to go move a billion dollars of Anthropic.”
VC funds must sell winning companies to build a sustainable business model
“Sell, you know, sell your dogs and keep your winners, and I think it's actually the, it's somewhat of the inverse, is you have to be able to, willing to sell your winners. To have a sustainable business model. And to generate the return that will actually driv…”
G Squared acquired early secondary shares at 35 cents on the dollar
“In early vintages, we got like 35 cents on the dollar by being a secondary direct buyer over primary buyers because there was no other secondary buyers.”
G Squared generated $1 billion in LP returns from Spotify
“We then went on to become a top 10 global shareholder of Spotify. We went as far as to putting up signs in their break room. We'll buy your shares, buying all these odd lot transactions along the way and built a huge position. And it ended up being like a bill…”
G Squared bought Spotify secondary stock at a 50% discount
“We bought it like a 50% discount to the current financing round. And we just kept buying it there for the next two years.”
G Squared sold massive holdings during the 2020-2021 peak
“Oh, just massive amounts. I mean, we made ridiculous sums of money for LPs. In that period, which set our business up to be able to survive a bad vintage, and we're working our tails off, our asses off on our twenty-twenty vintage, but it's hard.”
G Squared lost $400 million of LP capital on investments
“Yeah, it's a big win, but hey, we also lost. Four hundred million dollars of their money over here.”
G Squared made a 3x return selling Palantir stock at $9
“I sold it at like, I think we made a three X on it and sold it at like nine dollars a share.”
G Squared's 2020 fund comprised 70% primaries and 40% structured equity
“And so that vintage of all of our vintages has 70% primary. With, and 40% of that has structure.”
Aschebrook personally paid millions to settle a Theranos secondary deal dispute
“And then actually I don't think it was formally sued. It was threatened to be sued. And I agreed to settle it out of court and gave him a couple million dollars to go away.”
G Squared agreed to buy $50M in Theranos secondary stock
“The agreement was to buy about fifty million dollars of stock over, like, four months, because, you know Because I, because I'm still raising the fund.”
G Squared sold its final 23andMe shares at 70 cents
“We can start selling at seven, which would have meant I'm about a two X. I think I sold the last share at 70 cents.”
G Squared stopped share distributions to LPs to avoid blame
“We stopped distributing shares because LPs blame you if they hold it.”
The venture downturn allowed G Squared to build a large Wiz position
“Normalized scenario, we would have never been able to build this position in Wiz because it would, it was a hockey stick from day one, but the capital availability, even to the best assets in the world, wasn't great for 18 months.”
Fanatics generates billions in revenue and hundreds of millions in EBITDA
“I mean, the business is fantastic, and it's at scale, massive scale, billions of dollars of revenue, and hundreds of millions of dollars of EBITDA, like a massive company.”
G Squared is actively buying secondary shares in Anthropic, OpenAI, and Databricks
“A lot. A lot. And I've got appetite for more. Same with OpenAI. Same with Databricks. Wiz.”
G Squared acquired a large stake in Anthropic via FTX bankruptcy auction
“You know, we were fortunate enough during, you mentioned FTX earlier, to be awarded during the bankruptcy a bunch of stock. We bid on it. We went through the whole process, bid on the stock, bought a big chunk, and now the company, look, the company is, in my …”
Secondary shares and aggressive cost cuts can yield 5x in 3 years
“No, and then, by the way, layer some secondary on, lower the cost basis, and you have, you can make a five X in three years.”
G Squared returned $800M to LPs from Coursera investment
“We were the largest shareholder of Coursera. Eight hundred million dollars back to LPs on Coursera.”
Aschebrook began investing by buying stock from Jack Ma's family office
“I just started buying Twitter shares and Alibaba stock from Jack Ma's family office, and then holy shit, it worked.”
Fund managers should close capital immediately to build portfolio momentum
“So with my mentality still to this day, raising 1,000,000,002 billion dollar funds is the money's there. You close. Start deploying it. Build a portfolio. Show some improvement in NAV. It is inertia that makes it easier.”
G Squared raised $1.4B and rejected $700M in 2021
“We raised a 1,000,000,004 and then turned down another seven hundred million. In very short period of time.”
G Squared made a 3x return on Wiz in 18 months
“It starts to provide you that Trojan horse moment to know when to triple down on a whiz, which we did in our 20, 22 vintage fund, and have the outcome that we're gonna have. Those founders are amazing, but to make three X in 18 months, Is because of what they …”
G Squared uses initial small checks as Trojan horses for company data
“So in that land and expand strategy that we run, as it's developed often, that first check is, is kind of that Trojan horse, because you want to, you like it, you've done some mosaic theory work, you think it works, but you don't really know, you go in.”
G Squared raised $700 million in Spotify co-investment vehicles
“And in that you take a lot of concentration in Spotify, but on top of the concentration we had, we did another seven hundred million in co-invest.”
G Squared rarely holds post-IPO stock, preferring pre-IPO sales
“Rarely do we hold posts public. Oftentimes we sell before they're public, and as it went public at the price it did, on a converted basis we were underwater.”
G Squared eliminated gut feel from its investment process after 2021
“I think we had to really adjust ours after 20, 21, because I think it had holes in it that were Exacerbated. Too much qualitative. Too much my gut, my feel. Too much who else is in the room. Too much, yeah, just the soft stuff that venture capitalists and grow…”
G Squared generated a 3x net return on Toast
“Toast, awesome business. It's like, three X net, and started in 2018.”
G Squared put $200M total risk into Gorillas and Getir
“The total first was, it was like, fifty million bucks in total between secondary and primary, kind of, we got that plus sum and value of Gatir, and then the next check was a hundred million bucks. To restructure that equity, to pull it forward. So you get two …”